CommSec
iPod Index 2008

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CommSec iPod
Index October 2008
Review of the price of Apple
iPod 8gb nano music players around
the world, put out by the Commonwealth
Bank (CBA) owned broker CommSec to make
exchange rate theory more understandable.

According
to the most recent CommSec iPod
index, Australia is the cheapest place
in the world to buy an iPod (as of October
2008), a reflection on the recent fall
of the Australian dollar when measured
against the U.S. Dollar. The iPod index
is not a direct measurement of currency
exchange rates, but is designed to provide
price comparisons of the same goods when
purchased in different countries by foreign
buyers. The price comparisons are based
on the iPod 8GB nano in the value of U.S.
Dollars.

But
the iPod index reflects more than just
consumer electronics. The price comparisons
(stated in U.S. Dollars) also represent
the relative price differences of most
consumer goods between countries. While
the actual cost of the iPod may vary in
each location, the iPod index helps give
individuals a better idea of where their
country's currency stands in relation
to other developed nations. Ranking on
the iPod index does occasionally fluctuate
based on local price changes of the actual
product. Australian iPod prices have changed
in recent months as newer models have
been released and prices have dropped.

At
one point Australia was ranked as the
14th cheapest place (in a list of over
60 countries) in the iPod index as the
Aussie dollar gained strength. But a 45
percent decline in value against the U.S.
Dollar in July of 2008 has caused Australia
to top the list. The sharp fall of the
Aussie dollar was large enough to give
a five percent price difference on the
index between Australia and the two closest
countries: Korea and Canada. Indonesia,
New Zealand, Hong Kong, the US, India
and Taiwan round out the remaining top
ten cheapest places. According to the
CommSec iPod index, some of the most expensive
places to purchase an iPod are Argentina,
Brazil, Russia, and Uruguay.

A
weak Australian dollar may inhibit purchasers
in Australia from affording foreign goods,
but it will help to insulate the country
from economic recessions of other major
countries. Having cheaper goods will help
encourage other countries to purchase
goods from Australia and tourism is likely
to grow as a result of affordable travel
and products. Australians, however, may
feel less inclined to spend money abroad,
at least for the time being.

The
CommSec iPod index was started in January
2007 and began as a more modern equivalent
to The Economist's Big
Mac Index in which the price of a
McDonald's Big Mac is compared between
countries. Both indexes are designed to
test the theory that the same product
should sell for the same price (when adjusted
for exchange rates).

The 2008 Apple iPod Nano Index below was
compiled by the Australian broker CommSec.